In January 2009, Buchanan Renewables Power (BR Power) entered into a concession agreement and power purchase agreement with the Government of Liberia to construct and operate a 36 MW biomass fueled power plant in Liberia. The concession agreement was ratified by the Liberian Legislature in March 2009, which gave it the force of law.

Based on the ratified concession agreement and the signed power purchase agreement, BR Power:

• Secured financing for the project (the US Government’s Overseas Private Investment Corporation (OPIC) has committed US$112 million in debt financing for the project);

• Leased land for the construction site near Kakata;

• Completed the Environmental and Social Impact Assessment (ESIA) and obtained an environmental permit from the Liberian Environmental Protection Agency;

• Tendered and negotiated construction contracts with local and international contractors; and

• Spent in excess of US$20 million in legal, engineering, and other development costs given legally binding commitments made by the Government and LEC, as well as the ratified concession agreement.

BR Power has been ready to move forward with the construction of the plant since 2009.

During finalization of the auxiliary documents that detail the provisions of the concession and power purchase agreements, the Government of Liberia and the Liberia Electricity Corporation (LEC) decided that key terms agreed upon previously were unacceptable. The initial concern was the price at which BR Power would sell power to LEC. BR Power lowered its return projections and a reduced price of US$0.185/KwH was agreed in August 2010, at which time BR Power prepared to begin construction of the plant. However, the Government of Liberia and LEC then decided that the “lock box” or escrow payment system previously agreed was also unacceptable. This provision was critical to the financing of the plant by the US Government’s OPIC. At this stage, the Government of Liberia and LEC also expressed concerns about LEC’s capacity to take all of the power produced by BR Power. In an effort to reach agreement, commence construction of the plant and bring needed power to Liberia, BR Power and OPIC have presented a number of different options to modify the payment system, as well as the power plant project itself to accommodate LEC’s concerns. The Government of Liberia and LEC as yet have not accepted any of these options, nor have they presented any alternatives.

One of the options presented by BR Power was to approach industrial users of power to sign direct purchase agreements with BR Power and sell a smaller portion of the power from the plant to LEC. This would reduce the amount of power that LEC would be required to purchase. Based on initial indicators of support for this option from LEC, BR Power signed term sheets with two industrial users and submitted a proposed term sheet to LEC. LEC, however, has not yet responded to this proposal.

BR Power is prepared and ready to construct and operate the 36MW biomass power plant near Kakata, as per its ratified concession agreement with the Government of Liberia. However, in order to proceed with construction and fulfill the social obligations of the concession agreement, all negotiations and agreements must be finalized. Despite the costs incurred and the unwarranted blame for delays in the construction of the power plant, BR Power continues to work with the Government of Liberia, LEC and OPIC to find solutions and start construction of an environmentally friendly power plant that uses Liberian biomass as fuel, avoids the need for importing expensive and polluting diesel or heavy fuel, provides low cost power, and will be needed even when Mount Coffee comes back into service some year from now.

For further information contact: Momolu Vannie, Public Relations Officer, tel: +231 880 885 741